System and method for redeeming rewards and incentives

ABSTRACT

Transaction card comprising a substrate having a front face and a back face, a first magnetic stripe for storing data associated with a credit account, the first magnetic stripe being located along an edge of the back face, a second magnetic stripe for storing data associated with a rewards account, the second magnetic stripe being located along another edge of the back face, and account information located on the front face, the account information being associated with the credit account and the rewards account.

CROSS-REFERENCE TO RELATED APPLICATIONS

The present application is a continuation of U.S. patent applicationSer. No. 10/740,707 filed on Dec. 18, 2003 now U.S. Pat. No. 7,090,132entitled Jan. 4, 2008 SYSTEM AND METHOD FOR REDEEMING REWARDS ANDINCENTIVES, which application is incorporated herein by reference in itsentirety.

FIELD

The present application relates to a system and method for redeemingrewards and incentives and, more particularly, to a system and methodfor redeeming rewards and incentives using a transaction card having atleast two magnetic stripes.

BACKGROUND

Numerous financial institutions, such as credit card companies andbanks, and other entities, such as airline carriers, hotels andretailers, offer membership reward programs. These programs often rewardparticipants with fictitious reward units, such as points or the like,when purchasing merchandise or services from merchants using a qualifiedaccount, such as a debit or credit account. A participant may use atransaction card associated with the qualified account to conduct therespective transaction. Reward units typically accrue at a rate of oneunit for every dollar spent using the credit or debit account and theaccrued units operate as currency. Some entities restrict purchasing toparticular merchants to earn reward units, whereas other financialinstitutions have no such restrictions. The maximum reward units aparticipant can earn annually are usually unlimited. Additionally,reward units usually do not accumulate on cash advances, conveniencechecks, balance transfers, fees or adjustments. When merchandisepurchased with the respective account is returned, the account creditwill result in a reduction of reward units.

Participants usually seek to accumulate enough reward units to purchasemerchandise or services. For instance, a participant may seek toaccumulate enough reward units to purchase a particular product from anassociated merchant or purchase an airline ticket from anotherassociated merchant. Depending on the program, only certain merchantsare considered qualified merchants with whom reward units can beredeemed towards a purchase.

Membership reward programs also often offer participants other rewards,incentives or the like instead of or in addition to the ability toaccumulate reward units. For example, some membership reward programsreturn to a participant a predetermined percentage of a transactionamount or of an amount spent during a predetermined period (referred toas “cash back”) either as a credit to an account or by check, offerparticipants discounts on select merchandise or services, andcomplimentary merchandise or services.

As described above, a transaction card having a magnetic stripeassociated with a debit or credit account can be used by a participantto conduct a transaction and hence earn reward units and/or otherrewards, incentives or the like, assuming the participant is entitled tosuch rewards, incentives or the like, for instance, if the participantis enrolled in a membership reward program. The accumulated rewards,incentives or the like cannot be redeemed with the transaction card, asthe transaction card only has one magnetic stripe associated with acredit or debit account. Instead, other known methods for redemption areutilized by participants.

Transaction cards having more than one magnetic stripe are known in theart. However, the magnetic stripes are operable, for example, for accessto separate debit accounts having funds deposited therein and accountshaving credit lines associated therewith and are operable, for example,to separate transactions at the point-of-sale, such as business expensesand personal expenses.

A need, however, exists for a system and method that enables acardholder to accumulate rewards, incentives or the like and to redeemat least a portion of those rewards, incentives or the like using aparticular dedicated magnetic stripe located on a transaction cardhaving at least one other magnetic stripe.

SUMMARY

An aspect of the present application provides for a transaction card,comprising a substrate having a front face and a back face, a firstmagnetic stripe for storing data associated with a credit account, thefirst magnetic stripe being located along an edge of the back face, asecond magnetic stripe for storing data associated with a rewardsaccount, the second magnetic stripe being located along another edge ofthe back face, and account information located on the front face, theaccount information being associated with the credit account and therewards account.

Another aspect of the present application provides for a transactioncard, comprising a substrate having a front face and a back face, afirst magnetic stripe for storing data associated with a credit account,the first magnetic stripe being located along an edge of the back face,and a second magnetic stripe for storing data associated with a rewardsaccount, the second magnetic stripe being located along another edge ofthe back face, the second magnetic stripe including a plurality of datafields, data stored or no data being stored in at least one of theplurality of data fields identifying the second magnetic stripe as beingassociated with the rewards account, wherein account information islocated on the front face, the account information being associated withthe credit account and the rewards account, and the rewards account hasa balance equal to a number of accumulated reward units, the rewardunits operable as currency with at least one of a plurality of merchantssuing the second magnetic stripe.

A further aspect of the present application provides for a transactioncard, comprising a substrate having a front face and a back face, afirst magnetic stripe for storing data associated with a credit account,the first magnetic stripe being located along an edge of the back face,a second magnetic stripe for storing data associated with a rewardsaccount, the second magnetic stripe being located along another edge ofthe back face, first account information located on the front face, thefirst account information being associated with the credit account, andsecond account information located on the front face, the second accountinformation being associated with the rewards account.

A still further aspect of the present application provides for a methodfor processing a transaction initiated with a merchant using atransaction card having at least two magnetic stripes, the methodcomprising receiving data associated with the transaction, the dataincluding a purchase amount, determining according to the received datawhether a first magnetic stripe or a second magnetic stripe was read atthe merchant, the second magnetic stripe being associated with a rewardsaccount, converting the purchase amount to an amount of reward units, ifit is determined that the second magnetic stripe was read at themerchant, and determining whether the rewards account has a balance ofreward units at least equal to the amount of converted reward units.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 illustrates an exemplary reward accumulation and redemptionsystem according to the exemplary embodiments of the presentapplication;

FIG. 2 illustrates an exemplary transaction card used with the exemplarysystem shown in FIG. 1;

FIG. 3 illustrates the exemplary transaction card shown in FIG. 2 andexemplary accounts associated with respective magnetic stripes;

FIG. 4 illustrates the exemplary transaction card shown in FIG. 2 andexemplary accounts associated with respective magnetic stripes;

FIG. 5 illustrates an exemplary flow diagram for accumulating andredeeming rewards, incentives or the like according to the exemplaryembodiments of the present application;

FIG. 6 illustrates exemplary data fields associated with track 1 of amagnetic stripe; and

FIG. 7 illustrates exemplary data fields associated with track 2 of themagnetic stripe.

DETAILED DESCRIPTION

FIG. 1 depicts an exemplary reward accumulation and redemption system100. Reward accumulation and redemption system 100 enables a participantin a reward program (hereinafter referred to as “cardholder 145”) toearn rewards, incentives or the like, for instance, by engaging intransactions with merchants using a transaction card associated with aqualified financial account, and later redeeming those accumulatedrewards, incentives or the like using the same transaction card withthose merchants or with other merchants. An exemplary transaction cardof the present application, transaction card 150, includes at least twomagnetic stripes, as illustrated in FIGS. 2, 3 and 4 and describedherein.

In an exemplary embodiment of the present application, cardholder 145has the ability to earn a plurality of reward units, such as points, forexample, for purchases with merchants 140 a . . . 140 n using qualifiedfinancial account 305, such as a credit or debit account, shown in FIGS.3 and 4, as described herein.

The present application is applicable, to any institution or companyhaving a membership reward program associated therewith, includingfinancial institutions, airlines, supermarkets, hotels, car rentalcompanies, retail stores, Internet loyalty programs, loyalty providers,such as Carlson Companies, Inc. and Cendant Corporation, and Visa® andMasterCard® that offer rewards, incentives or the like. In an exemplaryembodiment of the present application, the membership reward program ismanaged directly by the institution or company, for instance, financialinstitution 315, as seen in FIG. 3. Alternatively, the membership rewardprogram is managed by a third party, for instance, third party 405associated with financial institution 315, as depicted in FIG. 4.Financial institution 315 may or may not in a partnership with thirdparty 405 and/or other party. For instance, in the event financialinstitution 315 has a partnership relationship with third party 405and/or other party, the relationship may involve a co-branding.

The membership reward program can also be operable as an independentreward program, as an accelerator reward program, as a coalition rewardprogram or otherwise, or as a combination thereof. As would beappreciated by a person having ordinary skill in the art, when enrolledin an accelerator program, a participant accelerates the earning ofreward units or the like in another reward program independent of theaccelerator program, for example, when conducting transactions with anaccount linked to the accelerator program. A coalition reward program,such as Upromise (www.upromise.com), is operable for participants toearn rewards from a particular suite of merchants. Other reward programscan be associated with the coalition reward program. When a participantconducts a transaction with one of the merchants within the suite usingone of these other reward programs, that participant earns additionalrewards. For instance, a reward program associated with a coalitionreward program is operable for participants to earn X % for everytransaction regardless of the merchant and an additional Y % fortransactions conducted with one of the merchants within the suite and anadditional Z % at another one of the merchants within the suite.

Accordingly, two or more membership reward programs can be linkedtogether so that a participant earns reward units or the like in asingle rewards account 310, 410 from various sources.

Reward system 100 includes exemplary transaction system 105 andexemplary rewards tracking system 110. Transaction system 105 is linkedto a plurality of merchants 140 a . . . 140 n via credit/debit network135. Transaction system 105 includes processing unit 115 and memory unit120 coupled to processing unit 115, processing unit 115 managing andrecording data associated with transactions between cardholder 145 andmerchants 140 a . . . 140 n. Memory unit 120 is operable for storingpersonal information pertaining to each participant, includingcardholder 145, and account data pertaining to the respectiveparticipants, for example, account number(s) and transaction data.Memory unit 120 can include various types of memory storage devices, forexample, one or more databases, relational or otherwise and, therefore,is not meant to be limited to any particular type of storage device.

Rewards tracking system 110 is linked to transaction system 105 andincludes processing unit 125 coupled to memory unit 130. Rewardstracking system 110 can either be associated with the reward programoffered, for example, by financial institution 315, associated with athird party, such as third party 405, having reward managingresponsibilities for reward accumulation and/or reward redemption, orresponsibilities can be shared between the respective parties.Processing unit 125 is operable for managing reward accrual andredemption, and memory unit 130 is operable for storing data regardingreward accrual and reward redemption for each respective participantincluding cardholder 145. Memory unit 130 can include various types ofmemory storage devices, for example, one or more databases, relationalor otherwise and, therefore, is not meant to be limited to anyparticular type of storage device.

In an exemplary embodiment, memory unit 130 and memory unit 120 arerelational databases so that data can be stored in both memory units130, 120 for cardholder 145. Alternatively, either memory unit 130 ormemory unit 120 is included in reward system 100 and can be included inrewards tracking system 110, transaction system 105, or elsewhere.Similarly, either processing unit 115 or processing unit 125 can beincluded in reward system 100 and can be included in rewards trackingsystem 110, transaction system 105, or elsewhere. The functionalityprovided by reward tracking system 110 and transaction system 105 canalso be provided by a single system, as opposed to separate systemslinked together, such as rewards tracking system 110 and transactionsystem 105.

Transactions and prospective transactions between cardholder 145 andmerchants 140 a . . . 140 n are processed by processing unit 115 viacredit/debit network 135. For instance, credit/debit network 135 couldbe the MasterCard®/Visa® network or other proprietary networks, such asPlus, Novus (debit), Diner's Club® (credit) and American Express®, theoperation and use of which are well known in the art and are, thus, notdescribed herein. Transactions between cardholder 145 and merchants 140a . . . 140 n can be initiated at a point-of-sale (“POS”) terminal,through an Internet link, through a mail link or through a telephonelink.

In an exemplary embodiment, cardholder 145 purchases with qualifiedfinancial account 305 merchandise and services from or through any ofthe plurality of merchants 140 a . . . 140 n and earns rewards,incentives or the like, such as reward units, on those purchases sincefinancial account 305 is associated with the reward program. Theaccumulated rewards, incentives or the like are reflected in rewardsaccount 310, 410. Cardholder 145, however, can only use those earnedreward units with those merchants, referred to hereinafter as qualifiedmerchants, amongst merchants 140 a . . . 140 n that have a preexistingbusiness arrangement with the reward program associated with financialaccount 305. Cardholder 145 is not restricted as to which of theplurality of merchants 140 a . . . 140 n, qualified or non-qualified,they can make purchases from or through. Furthermore, depending on thereward program, cardholder 145 may be able to redeem reward units forgift certificates, cash or the like and, therefore, have the ability tomake purchases from any merchant amongst the plurality of merchants 140a . . . 140 n, assuming the respective merchant accepts such giftcertificates, cash or the like. As will be appreciated by a personhaving ordinary skill in the art, the present application is not limitedto redemption within credit/debit network 135.

Alternatively, cardholder 145 can use those earned reward units or otherrewards, incentives or the like, with any one of the merchants 140 a . .. 140 n regardless of whether the respective merchant has a preexistingbusiness arrangement with the reward program associated with financialaccount 305. Hence, the respective merchant processes the transactionusing, for instance, the earned reward units as currency without beingaware that a form of payment was used other than a cash reserve or acredit line.

The exemplary embodiments of the present application are describedherein with reference to reward units as being points, and earning andredeeming the same. The present application, however, is not limited topoints, as points are units merely symbolizing a form of currency foruse towards transactions. Hence, other symbols operable as currency areequally applicable to the exemplary embodiments of the presentapplication, for instance, miles, stars, dollars, cash, rebates orcredits.

Further, the exemplary embodiments of the present application aredescribed herein with reference to participants such as cardholder 145.Participants are individuals that have enrolled, for instance, in themembership reward program and therefore are entitled to earn and redeempoints. Even though the exemplary embodiments are described herein withreference to such participants having membership in a reward program,alternatively, membership in a particular program is not a prerequisitefor earning and redeeming rewards, incentives or the like.

The components of FIG. 1 may be implemented through hardware, software,and/or firmware. The components in reward system 100 are not limited tothose illustrated.

Exemplary transaction card 150 is depicted in more detail in FIG. 2.Transaction card 150 includes front face 205 and back face 210.Transaction card 150 is a conventional transaction card excepttransaction card 150 includes conventional magnetic stripe 215 and anadditional magnetic stripe—reward magnetic stripe 220 on back face 210.Reward magnetic stripe 220 is located along the bottom, horizontal sideedge of transaction card 150, as can be seen in FIG. 2. Alternatively,the location of conventional magnetic stripe 215 and reward magneticstripe 220 can be reversed from what is illustrated in FIG. 2.

As will be appreciated by a person having ordinary skill in the art,conventional magnetic stripe 215 and reward magnetic stripe 220 eachinclude at least one track having a plurality of data fields. FIGS. 6and 7 illustrate two tracks associated with each magnetic stripe.Specifically, FIG. 6 illustrates exemplary data fields associated withtrack 1 605 of conventional magnetic stripe 215 and reward magneticstripe 220 and FIG. 7 illustrates exemplary data fields associated withtrack 2 705 of conventional magnetic stripe 215 and reward magneticstripe 220, track 1 605 and track 2 705 having exemplary data encodedthereon for illustration purposes. Alternatively, conventional magneticstripe 215 and/or reward magnetic stripe 220 can have one track or canhave more than two tracks. As will also be appreciated by a personhaving ordinary skill in the art, a magnetic stripe often has multipletracks encoded with the same or similar data because different devices,such as POS terminals, automated teller machines or the like, may readdifferent tracks. One of the multiple tracks may also be left empty—notencoded with any data. The exemplary embodiments of the presentapplication, however, are equally applicable to a magnetic stripe havingone track.

The data fields of track 1 605 are encoded with data indicating, forinstance, account number 610, card holder's name 615, expiration date620, service code 625 and PIN verification (optional) 630, as depictedin FIG. 6. Track 1 605 also includes a discretionary data field 635, anoperation of which is described herein. The data fields of track 2 705are encoded with data indicating, for instance, account number 710,expiration date 715, service code 720 and PIN verification (optional)725, as illustrated in FIG. 7. Track 2 705 also includes a discretionarydata field 730, an operation of which is described herein. The presentapplication is not limited to the data fields shown in FIGS. 6 and 7.For instance, additional data fields can be included, the size of arespective data field can be different and the ordering of the datafields in a respective track can be different.

Transaction card 150 also includes indicia 230 on front face 205,indicia 230 being, for example, an account number, an expiration dateand the name of cardholder 145. Besides conventional magnetic stripe 215and reward magnetic stripe 220, back face 210 includes signature box225. Front face 205 and rear face 210 can include various otherinformation in addition to or in place of indicia 230 and signature box225. In an alternative embodiment of the present application, front face205 includes another set of indicia such that indicia 230 corresponds tofinancial account 305 and the other set of indicia corresponds torewards account 310,410, or vice versa.

FIG. 3 illustrates exemplary accounts accessible when using conventionalmagnetic stripe 215 and reward magnetic stripe 220. For instance,conventional magnetic stripe 215 is operable for accessing financialaccount 305 managed by financial institution 315. As described herein,financial account 305 can be a credit account, a debit account such as achecking account, savings account, a money market account or the like, acollege fund account, a stored value account, or the like. Rewardmagnetic stripe 220 is operable for accessing rewards account 310 alsomanaged by financial institution 315. In an exemplary embodiment,rewards account 310 has a balance equal to a number of accumulatedreward units, for example, points.

Alternatively, reward magnetic stripe 220 can be operable for accessingrewards account 410 managed by third party 405, as shown in FIG. 4.Third party 405 is linked to financial institution 315. As a result,data regarding the membership reward program managed by third party 405is accessible to financial institution 315 so that financial institution315 can accept or decline attempted transactions by cardholder 145, asdescribed herein or third party 405 can accept or decline attemptedtransactions and transmit data indicating such a determination tofinancial institution 315.

FIG. 5 illustrates an exemplary flow chart for accumulating andredeeming rewards, incentives or the like according to the exemplaryembodiments of the present application. As points are accumulated bycardholder 145, the respective points are thereafter deposited inrewards account 310 (and/or rewards account 410), in 505. That is, thebalance of rewards account 310 is increased according to a valueattributed to the accumulated points. Points can be earned based onpurchases with or without using transaction card 150, promotions,bonuses, incentives, points savings such as interest on points,redemption behavior or the like.

Transaction card 150 is presented by cardholder 145 to one of theplurality of merchants 140 a . . . 140 n, for instance, at a POSterminal. The POS terminal or other device, alone or in combination withone or more additional devices, reads data stored in the plurality ofdata fields of either conventional magnetic stripe 215 or rewardmagnetic stripe 220 depending on which magnetic stripe was read. Eachtime transaction card 150 is read at one of the plurality of merchants140 a . . . 140 n, the respective one of the plurality of merchants 140a . . . 140 n transmits transaction data to processing unit 115 andprocessing unit 115 in turn receives the respective transaction datawhich includes at least a portion of the data read from the plurality ofdata fields via credit/debit network 135, in 510. Based on an evaluationof the received transaction data, processing unit 115 determines whetherreward magnetic stripe 220 or conventional magnetic stripe 215 was readat merchant 140 a . . . 140 n, in 515.

In an exemplary embodiment, processing unit 115 determines whetherreward magnetic stripe 220 or conventional magnetic stripe 215 was readat merchants 140 a . . . 140 n by examining data stored in at least onepredetermined data field of the respective magnetic stripe, for example,discretionary data stored in discretionary data fields 635, 730 shown inFIGS. 6 and 7, respectively. For instance, the predetermined datafield(s) of the reward magnetic stripe 220 includes data, whereas thecorresponding data field of the conventional magnetic stripe 215 doesnot contain any data. Hence, processing unit 115 determines that rewardmagnetic stripe 220 was read by the presence of data in the at least onepredetermined data field. Alternatively, the predetermined data field(s)of the conventional magnetic stripe 215 and the corresponding datafield(s) of the reward magnetic stripe 220 contain different data. As aresult, processing unit 115 determines whether reward magnetic stripe220 or conventional magnetic stripe 215 was read at merchants 140 a . .. 140 n by examining the content of the respective data fields.

In an exemplary embodiment, the same data is encoded in track 1 605 andtrack 2 705 of reward magnetic stripe 220 since different POS terminalsor other devices may read different tracks of reward magnetic stripe705. Some POS terminals or other devices may even read both tracks.Alternatively, track 1 605 and track 2 705 are not encoded with anydata.

As will be appreciated by a person having ordinary skill in the art, thepresent application is not limited to the above-described manners ofdetermining which magnetic stripe was read at one of the plurality ofmerchants 140 a . . . 140 n. Other manners can be used instead of or inaddition to the manners described herein that are within the scope ofthe present application. In an exemplary embodiment, data is stored inthe predetermined data field(s) at the time one or more of the otherdata fields is coded with data, such as account data.

If processing unit 115 determines that conventional magnetic stripe 215was read at merchant 140 a . . . 140 n, then at least a portion of thetransaction data indicating the account number is used by processingunit 115 to process the transaction initiated by cardholder 145 in aconventional manner for processing credit or debit transactions whichare well known to a person having ordinary skill in the art, in 520.Further, in an exemplary embodiment, assuming the transaction isauthorized, at least a portion of the received transaction data istransmitted to rewards tracking system 110 so that the respective amountof reward units (points) earned based on the amount of the transactionis deposited in rewards account 310, 410.

If processing unit 115 determines, however, that reward magnetic stripe220 was read at merchant 140 a . . . 140 n, then at least a portion ofthe received transaction data and/or other data is transmitted toprocessing unit 125 of rewards tracking system 110, that data indicatingat least the monetary value of the attempted transaction by cardholder145, referred to hereinafter as the purchase amount data. In anexemplary embodiment, processing unit 125 of rewards tracking system 110converts the purchase amount data into at least a portion of a rewardunit (point) using a predetermined computation, for instance, everydollar equals X reward unit(s), in 525.

Next, processing unit 125 retrieves data stored in memory unit 130indicating the balance of rewards account 310, 410. Processing unit 125then determines whether the balance of rewards account 310, 410 is equalto or greater than the amount of point a representing the convertedpurchase amount, in 530. If it is determined that the balance is equalto or greater than the converted purchase amount, then processing unit125 transmits data to processing unit 115 indicating transactionauthorization and processing unit 115 in turn transmits data indicatingtransaction authorization to the respective one of the plurality ofmerchants 140 a . . . 140 n, in 535. Processing unit 115 and/orprocessing unit 125 then adjusts the balance of reward account 310, 410to reflect the converted converted amount which data is stored in memoryunit 130, in 540. For example, the balance of reward account 310, 410 isdecreased by an amount equal to the amount of points representing thepurchase amount.

If processing unit 125 determines that the balance of reward account310, 410 is less than the converted purchase amount, then processingunit 125 and/or processing unit 115 determines whether at least oneother payment method is available to cover at least a portion of thetransaction amount, for instance, whether cardholder 145 has anassociated credit account and/or an associated debit account that has asufficient credit line and/or cash, respectively, in 545. In anexemplary embodiment, the associated credit account and/or theassociated debit account is financial account 305. As will beappreciated by a person having ordinary skill in the art, data regardingaccounts other than or in addition to financial account 305 can beretrieved and evaluated by processing unit 115 and/or processing unit125 for determining whether a sufficient credit line and/or cash isavailable.

In an exemplary embodiment, in order to determine whether at least oneother payment method is available, processing unit 115 and/or processingunit 125 determines the difference between the balance of reward account310, 410 and the converted purchase amount (referred to hereinafter asthe “difference amount”). After determining the difference amount,processing unit 115 and/or processing unit 125 determines whetherfinancial account 305 has an open credit line and/or cash that isgreater than or equal to the difference amount, for example, uponretrieving data stored in memory unit 120. If financial account 305 hasa sufficient open credit line and/or balance, then processing unit 115transmits data indicating transaction authorization to the respectiveone of the plurality of merchants 140 a . . . 140 n, in 555. Processingunit 115 and/or processing unit 125 then adjusts the balance of rewardaccount 310 to reflect the purchase amount, in 560. For example, thebalance of reward account 310, 410 is decreased to zero or negativereward units predetermined by one or more business rules. The differenceamount is credited or debited from financial account 305 depending onwhether a credit line or cash, respectively, was used to fund part orall of the purchase amount, in 570. If financial account 305 has both acredit line and cash, then both can be used if need be in order to fundthe purchase amount.

If financial account 305 does not have a sufficient open credit lineand/or cash, processing unit 115 searches for other accounts associatedwith cardholder 145 and if one or more such accounts are located, dataregarding the account(s) is retrieved from memory unit 120 for locatinganother potential source for funding the difference amount. If no suchaccount is located by processing unit 115 or if one or more accounts arelocated but do not have a sufficient credit line or cash, alone or incombination, processing unit 115 transmits data indicating that thetransaction has been denied to the respective one of the plurality ofmerchants 140 a . . . 140 n, in 550.

On the other hand, if one or more other accounts are located byprocessing unit 115, processing unit 115 transmits data to therespective one of the plurality of merchants 140 a . . . 140 nindicating approval of the transaction, in 555. Depending on thepurchase amount, the balance of the reward account balance is decreased,for example, to zero or negative reward units, in 560. Further, thecredit line and/or cash of the one or more other accounts, for instance,financial account 305, is increased and/or decreased, respectively, tofund the difference amount, 570.

The respective one of the plurality of merchants 140 a . . . 140 nreceives transaction authorization data or transaction denial data fromprocessing unit 115 via credit/debit network 135 and consummates or doesnot consummate, respectively, the transaction with cardholder 145. Aswill be appreciated by a person having ordinary skill in the art,regardless whether conventional magnetic stripe 215 or reward magneticstripe 220 is read at the respective merchant 140 a . . . 140 n, themerchant's experience is the same and hence the use of reward magneticstripe 220 by cardholder 145 to make a purchase and the subsequentprocessing is transparent to the respective merchant.

Alternatively, rewards account 310, 410 can have a balance equal to anamount of money earned from a rewards and cash back program. Forexample, for every predetermined amount that cardholder 145 spends usingfinancial account 305 or for predetermined transactions whether usingconventional magnetic stripe 215 or otherwise, a predeterminedpercentage of the amount of the purchase is deposited into rewardsaccount 310, 410. Accounts other than account 305 can also be linkedthereto so that cardholder 145 earns additional reward units or cashback. The accumulated cash in rewards account 310, 410 can be redeemedby cardholder 145 and the transaction can be processed in the samemanner as described herein for redeeming points.

The present application is not limited to rewards account 310, 410 beingassociated with accumulated reward units and cash back. Rather, otherrewards, incentives or the like can be accumulated and redeemed by usingreward magnetic stripe 220 such as credits, savings, certificates,changing membership status, for example, gold membership status toplatinum membership status in a tiered product and special servicing,for example, a cardholder always gets a live telephone associate or theuse of a specialized rewards planner.

In an alternative embodiment of the present application, as opposed todata indicating account number(s) being stored on conventional magneticstripe 215 and reward magnetic stripe 220, the magnetic stripes areencoded with data used by processing unit 115 to determine therespective account number, for instance, by utilizing a look-up table orthe like stored in memory unit 120 and/or memory unit 130. In a furtheralternative embodiment of the present application, data indicating thesame account number is encoded on conventional magnetic stripe 215 andreward magnetic stripe 220. However, at least one of the plurality ofdata fields associated with each of the magnetic stripes is encoded withdata used by processing unit 115 to determine whether to accessfinancial account 305 or rewards account 310, 410, for instance, byutilizing a look-up table or the like stored in memory unit 120 and/ormemory unit 130.

The embodiments described above are illustrative examples of the presentapplication and it should not be construed that the present applicationis limited to these particular embodiments. Various changes andmodifications may be effected by one skilled in the art withoutdeparting from the spirit or scope of the invention as defined in theappended claims.

1. A transaction card, comprising: a substrate having a first face and asecond face; a first magnetic stripe for storing data associated with afirst account, the first magnetic stripe being located along an edge ofthe second face; a second magnetic stripe for storing data associatedwith a second account, the second account being a reward account, thesecond magnetic stripe being located along another edge of the substrateand the second magnetic stripe operable for redeeming a reward; andaccount information located on the substrate, the account informationbeing associated with the first account and the reward account, whereinthe reward account and a third account fund a transaction when the dataon the second magnetic stripe is read.
 2. The transaction card as setforth in claim 1, wherein at least two of the first account, the secondaccount and the third account are associated with different entities. 3.The transaction card as set forth in claim 2, wherein the entityassociated with the first account is a first financial institution andthe entity associated with the third account is a second financialinstitution.
 4. The transaction card as set forth in claim 1, whereinthe reward account is linked to another reward account, the other rewardaccount including a second plurality of reward units redeemable usingthe second magnetic stripe.
 5. The transaction card as set forth inclaim 1, wherein the reward is issued by an entity, and the reward isredeemable using the second magnetic stripe with a merchant notassociated with the entity.
 6. The transaction card as set forth inclaim 1, wherein the first account is either a savings account, achecking account, a credit account, a money market account, a collegefund account or a stored value account.
 7. The transaction card as setforth in claim 1, wherein the reward account includes a reward balance,and the reward balance is increased after conducting a transaction withthe first account.
 8. The transaction card as sat forth in claim 1,wherein the reward is a predetermined amount of a transaction, thetransaction being funded by the first account.
 9. A method forprocessing a transaction initiated with a merchant using a transactioncard having at least two magnetic stripes, the method comprising:receiving data associated with the transaction, the data including apurchase amount; and determining according to the received data whethera first magnetic stripe or a second magnetic stripe was read at themerchant, the second magnetic stripe being associated with a rewardsaccount and operable for redeeming at least one reward unit.
 10. Themethod for processing a transaction as set forth in claim 9, furthercomprising: converting the purchase amount to an amount of reward units,if it is determined that the second magnetic stripe was read at themerchant; and determining whether the rewards account has a balance ofreward units at least equal to the amount of converted reward units. 11.The method as set forth in claim 10, further comprising: accessinganother account for funding at least a portion of the purchase amount,if it is determined that the rewards account has a balance of rewardunits less than the amount of converted reward units.
 12. The method asset forth in claim 11, further comprising: one of increasing a creditline of the other account by the amount of the converted reward units ordecreasing a balance of the other account by the amount of convertedreward units.
 13. The method as set forth in claim 10, furthercomprising: accessing a plurality of other accounts for funding at leasta portion of the purchase amount, if it is determined that the rewardsaccount has a balance of reward units less than the amount of convertedreward units.
 14. The method as set forth in claim 13, wherein theplurality of other accounts are used to fund the at least the portion ofthe purchase amount.
 15. The method for processing a transaction as setforth in claim 9, wherein determining according to the received datawhether the first magnetic stripe or the second magnetic stripe was readat the merchant includes evaluating data stored in at least onepredetermined data field of the second magnetic stripe, and comparingthe data to data stored in a table.
 16. A transaction card, comprising:a substrate having a first face and a second face; a first magneticstripe for storing data associated with an account, the first magneticstripe being located along an edge of the second face; a second magneticstripe for storing data associated with a rewards account, the secondmagnetic stripe being located along another edge of the second face andoperable for redeeming at least one reward unit; first accountinformation located on the first face, the first account informationbeing associated with the account; and second account informationlocated on the first face, the second account information beingassociated with the rewards account.
 17. A transaction card, comprising:a substrate having a first face and a second face; a first magneticstripe for storing data associated with an account, the first magneticstripe being located along an edge of the second face; a second magneticstripe for storing data associated with a rewards account, the secondmagnetic stripe being located along another edge of the substrate andoperable for redeeming at least one reward unit; first accountinformation located on the substrate, the first account informationbeing associated with the account; and second account informationlocated on the substrate, the second account information beingassociated with the rewards account.
 18. A transaction card, comprising:a substrate having a first face and a second face; a first magneticstripe for storing data associated with an account, the first magneticstripe being located along an edge of the second face; a second magneticstripe for storing data associated with a rewards account, the secondmagnetic stripe being located along another edge of the substrate andoperable for redeeming at least one reward unit; first accountinformation located on the substrate, the first account informationbeing associated with the account; and second account informationlocated on the substrate, the second account information beingassociated with the rewards account, wherein the account and the rewardaccount fund a transaction when the data on the second magnetic stripeis read.
 19. A transaction card, comprising: a substrate having a firstface and a second face; a first magnetic stripe for storing dataassociated with a first account, the first magnetic stripe being locatedalong an edge of the second face; a second magnetic stripe for storingdata associated with a second account, the second account being a rewardaccount, the second magnetic stripe being located along another edge ofthe substrate and the second magnetic stripe operable for redeeming areward; first account information located on the substrate, the firstaccount information being associated with the first account; and secondaccount information located on the substrate, the second accountinformation being associated with the rewards account, wherein thereward account and a third account fund a transaction when the data onthe second magnetic stripe is read.